Volvo is planning to increase the output of its V60 plug-in hybrid after receiving better-than-expected demand. The carmaker plans to build 10,000 V60 plug-in hybrids by the end of 2014, up from a previous goal of 4,000 to 6,000 units. According to Volvo, the increasing demand for the V60 plug-in hybrid is partly due to the emissions-based tax breaks provided to the car, which emits only 48 grams of carbon dioxide per kilometer.

A Volvo spokesperson remarked that the V60 plug-in hybrid has done well since the tax exemptions for plug-in hybrids “are so good," adding that demand for the car has far exceeded expectations. Volvo said that for the initial production run of 1,000 V60 plug-in hybrids, the biggest markets outside of Sweden was the Netherlands, Belgium and Germany. Volvo is selling the car only in Europe.

The V60 plug-in hybrid’s starting price of EUR63,995 ($82,500) in the Netherlands is further trimmed by zero new-car purchase tax and favorable company car tax. Starting 2014, vehicles emitting under 50g/km of CO2 will be exempted from annual road tax in the country. A spokeswoman for Volvo in the Netherlands remarked that company drivers pay no tax to use the V60 plug-in hybrid, compared with EUR6,000 to EUR10,000 for a standard car.

She said that private costumers could trim the price to around EUR30,000 with government subsidies. Volvo remarked that when the V60 plug-in hybrid was first announced, there were already buyers for it even they had no knowledge of the spec. The V60 plug-in hybrid is powered by a combo of 2.4-liter diesel engine and an electric motor. It can cruise up to 50km on electric power alone, helping it achieve fuel usage of 1.8 liters per 100km.